How to Start a Vegetable Oil Production Company

Then below is an in-depth guide on how to start a vegetable
oil production company.

Vegetable oil is the clear oil extract derived from plants (such as coconut, groundnut, palm kernel)
through a pressing process. All over the world, several billions of
pounds of vegetable oil are produced by farmers every year.

In the
United States alone, farmers produce as much as 16 billion pounds of
vegetable oil every year.People use vegetable oil for a wide
range of purposes, which include cooking, and production of plastics and
soaps. In fact, the waste products of vegetable oil production are now
used to fuel diesel engines.

Vegetable oil production presents
huge opportunities for small business entrepreneurs, as there is a wide
consumer base and various sectors to serve. There is also the option of
working in collaboration with large vegetable oil extraction companies,
such as the American Vegetable oil.

So if you are looking to start
a small business, then vegetable oil production might be the best
option to consider. The following are the steps involved in setting up a
vegetable oil extraction business.

How to Start a Vegetable Oil Production Company – Sample Business Plan

Vegetable Oil

1. Learn more about the businessYou
will need to conduct extensive research on what a vegetable oil
production business requires in terms of capital, competition, market
size and trends, and other insights on the business.For example,
you can visit business statistics websites such as IBISWorld to find out
the economical statistics on vegetable oil production business.

You can
also visit forums and online communities to learn more about the
opportunities in the business.

Another option is to search the web
for information about established vegetable oil extraction companies
within your state or country, and personally visit the premises (if possible)
to gain some insight on the establishment and operation of the
business.

Examples of vegetable oil production companies in the United
States include American Vegetable Oil (California) and CP Vegetable Oil (Fort Lauderdale).2. Craft your business planHaving
a business plan before plunging into a new business is like having a
compass before setting out on a voyage; it gives you insight on
everything you will need to set up and run the business successfully.In
your business plan, you will include the required capital and projected
cost of running the business, target market, competition analysis, and
so on.Before writing the business plan, you will need to conduct
research on the cost of equipment, such as a vegetable oil processing
machine, packaging instruments, and so on. You will also need to
estimate the cost of transporting raw materials from suppliers to your
location as well as extraction costs.3. Decide on your source of raw materialsYou
have two options for obtaining the raw materials needed for vegetable
oil extraction. You can either buy the plants from a supplier or have
your own farm for cultivating the plants (olive oil, groundnuts, coconuts, etc).If
you are planning to start small or quickly, you will want to buy the
raw material from a supplier. However, the second option (that is, having your own farm) is better and more economical, but it is more expensive; and setting up the farm takes time.4. Find a good locationThe
location of your business is another very important factor that can
make or break it. It is best to locate it close to your source of raw
materials. For example, if you will be going into olive oil production,
you should locate your extraction plant close to an olive oil
plantation. This will reduce transportation costs, which could be
crippling at times.5. Get the fundsIf
you have all the required capital to yourself, that’s fine. But if you
would need funds from other sources, start approaching those sources
with your business plan. If your business plan presents your business as
a very promising and lucrative one, you would easily attract investors
or get loans from banks or other lending institutions.6. Get the equipmentThe
most important of all the equipment you will need is the extracting
machine. The cost of this machine depends on the model and the tasks it
can perform. For example, the D-1688 costs between $3,000 to $5,000.
Other equipment you will need include large storage containers and
instruments for cleaning and packaging.7. Hire employeesUsing
various media, you will need to advertise vacancies for employees in
the oil extraction process, and select the best employees to work with
you.8. Market and launch your businessIt is
important that you market your business through a wide range of
effective media.

You can start by visit businesses that fall within your
target group, such as restaurants and manufacturing industries. Also,
you can approach retailers and entice them with attractive discounts.

You
will need to have a ready list of reasons why your oil should be
preferred over that of the competition. These are your unique selling
points, and you will need them to help you win customers.